The Bahamas IBC Act represents modern company legislation and according to industry sources *”contains the most advanced and innovative company and investor oriented provisions in company management and administration”* available today.
The IBC Act 2000 repealed the International Business Companies Act 1989 and re-enacted provisions for the incorporation, registration and operation of International Business Companies. The Act, and subsequent amendments, modified the Bahamian IBC so that bearer shares are no longer permitted and directors and officers must be a matter of public record.
The abolition of bearer shares and the requirement of public registration of directors and officers addressed FATF issues of transparency. The IBC is widely considered a legitimate vehicle for international business and is fully compliant with international best practices.
In The Bahamas, only banks and trust companies licensed under the Banks & Trust Companies Regulations Act and financial and corporate service providers licensed under the Financial & Corporate Service Providers Act may provide registration, management, administration, registered agent, registered office, nominee shareholders and officers and directors for IBCs. Full application of the know-your-customer regime is required under the Financial Corporate Service Providers Act and, when the IBC establishes a facility in The Bahamas, the Financial Transactions Reporting Act and Regulations of The Bahamas also apply to IBCs.
An international business company is a versatile corporate entity and has been described by one practitioner as being *“tailor-made for the needs of international business”*, having the attractive features of limited liability, minimal legal restrictions, ease of administration, and speed of incorporation. International Business Companies (IBCs) are no longer prohibited from conducting business with Bahamian residents or from having an interest in, or lease of, real property in The Bahamas. Additionally, it is not subject to taxes, estate duties and stamp duties; stamp tax is payable, however, if an IBC deals in Bahamian property.
The corporate entity works well in conjunction with trusts and asset protection structures, and remains the vehicle of choice for fund incorporations. A Bahamian-incorporated IBC allows a client to operate many aspects of a business with ease and confidentiality, with the additional benefit of tax neutrality. Such companies can also help manage and maximise income, thus providing fiscal advantages as well.
Importantly, the IBC Act 2000 contains provisions for the protection of the assets of a company for its benefit, and also that of its creditors and its shareholders. The Act contains specific provisions for the protection of minority shareholders.
**Financial Services Industry**
IBCs continue to represent an important component of the Bahamas Financial Services industry. In Bahamas Government revenue, IBC fees account for between $15-18 million annually, comprising annual maintenance fees, incorporation fees and fees for other ancillary services, in particular the issuance of certificates of good standing. Additionally, substantial private sector revenues accrue from incorporation and maintenance fees. With the tabling of a bill to amend the IBC Act 2000 during this session of Parliament, further improvements are anticipated.
BFSB has established a close working relationship with the Registrar General’s Department, and coordinates regular meetings to discuss issues of concern. Industry recognises that the Department plays an essential role in the financial services industry. The service provided relative to the incorporation and management of companies can have a tremendous impact on the impression end users and intermediaries have of The Bahamas. In short, the level of success the industry achieves is directly related to service standards provided in the very fundamental task of forming and maintaining companies.
Last week, BFSB hosted an Industry Roundtable to provide the opportunity for the Ministry of Financial Services and Investments, whose mandate includes the Department, and the Registrar General and his team to update practitioners on a number of developments. These included the Registered Agent Information System and Agent Internet Module, introduced earlier this year.
**Registered Agent Information System**
Registered Agents now have the technological framework to incorporate international business companies and take advantage of a range of other corporate services electronically, in a secure, reliable environment. Agents licensed by the Inspectorate of Financial and Corporate Service Providers (FCSP) or under the Banks & Trust Companies Regulations Act (BTRA), with fees paid to date, can access the Companies Register of the Registrar General’s Department using a dedicated IP address and PINS (personal identification numbers).
In addition to the incorporation of IBCs, services available to licensed agents include name reservations, enquiries and reports, file downloads and maintenance, and filing of electronic documents. An important feature of the new system is database file transfer, allowing agents to compare records with that of the Registrar General’s Department, thus ensuring consistency and completeness of data. An online help feature is complemented by a Technical Help Desk.
IBM Consultants have been working with the Registrar General’s Department to implement the RAIS system, on a phased basis. Phase II is expected to be launched in November 2003, with a further Phase III planned to ensure that full computerisation of all aspects of the Registrar General’s office is completed within the next two years.